Canada's National Contact Point (NCP)

Annual Report 2007

Introduction

The OECD Guidelines for Multinational Enterprises is an instrument of the Organization for Economic Cooperation and Development (OECD). The recommendations set forth in the Guidelines are a voluntary, multilateral framework of standards and principles on responsible business conduct.

As a member of the OECD and signatory to the Guidelines, Canada is obligated to establish a national contact point (NCP). The role of the NCP is to promote awareness of the Guidelines and ensure their effective implementation. This report provides a summary of the activities undertaken by Canada’s NCP in the past year (June 2006 - June 2007).

The Canadian Policy Context

The Guidelines continue to be an important element of the government’s approach to promoting corporate social responsibility (CSR). A number of federal government departments are active in this area, through activities such as information dissemination, facilitation of dialogue among interested parties, promotion of CSR in international fora (such as the OAS and the G8) and support for the development of international norms. The Guidelines are a central part of these activities, their contribution heightened by the fact that they represent the shared views of thirty-nine national governments on what constitutes appropriate corporate behaviour.

The business community in Canada is promoting CSR as well, with an increasing number of enterprises adopting codes of ethical conduct and related management strategies. The Guidelines offer a frame of reference for private sector initiatives and the NCP serves as a mechanism to facilitate cooperation between the government and the business community in the promotion of CSR. The Guidelines and NCP also provide a forum for engagement with other key stakeholders, such as labour groups and non-governmental organizations (NGOs) on CSR issues.

The Guidelines make an important contribution to the Government’s policy on promoting sustainable development. Achieving sustainable development requires the responsible engagement of all sectors of society, including the business community. The Guidelines encourage corporations’ contribution to sustainable development and help to strengthen the basis of mutual confidence between enterprises and the societies in which they operate.

Thus, while our NCP has a clear mandate to implement the Guidelines, its activities also support broader policy objectives of the Government.

2006 National Roundtables on Corporate Social Responsibility and the Canadian Extractive Sector in Developing Countries

In June 2005, the Subcommittee on Human Rights and Development of the Standing Committee on Foreign Affairs and International Trade (SCFAIT) submitted a report to Parliament entitled Mining in Developing Countries and Corporate Social Responsibility. The report emphasized that a greater role for government is warranted to ensure that Canadian companies have the necessary knowledge, support and incentives to conduct activities abroad in a socially and environmentally responsible manner. The Government of Canada tabled its response in October 2005, which included a commitment to organize a series of Roundtables to explore the issues raised in the report in more depth.

Following this response, the Government of Canada, led by the Department of Foreign Affairs and International Trade (DFAIT), hosted four public Roundtables on Corporate Social Responsibility (CSR) and the Canadian Extractive Sector in Developing Countries. These Roundtables were held from June to November 2006 in Vancouver, Toronto, Calgary and Montreal. The Roundtables were a consultation process to engage industry, civil society and the public in a solutions-oriented discussion on how to enable the Canadian global extractive sector to better identify and manage the social and environmental risks of their operations.

To coordinate the National Roundtables process, DFAIT established a Steering Committee composed of nine government departments and agencies (DFAIT, Industry Canada, Natural Resources Canada, Environment Canada, Export Development Canada, Indian and Northern Affairs Canada, Canadian International Development Agency, Justice Canada and the Privy Council Office) as well as an Advisory Group made up of non-government experts drawn from across stakeholder groups (civil society, labour, industry, investment sector and academics) acting in their expert capacity. This multi-stakeholder Advisory Group was established to work with the Government to jointly plan and implement the Roundtable process.

Over the course of the Roundtables, 156 oral presentations were heard and 104 written submissions were received. Almost half of the submissions were from civil society and labour organizations, one quarter from industry, and the remainder from academics, research institutes, and members of the public. The Roundtables also benefited from the participation of a total of 57 prominent Canadian and international experts.

Throughout this process, representatives of Canada’s National Contact Point provided input into the development of these Roundtables and participated in the events.

The Advisory Group for the National Roundtables on CSR and the Canadian Extractive Sector in Developing Countries released the "Advisory Group Report", which is the final output of this year-long consultation process, on 29 March 2007.

The Advisory Group Report recommends the development of a “Canadian CSR Framework” that knits together a set of standards Canadian extractive sector companies are expected to meet, a reporting scheme to monitor the adherence to those standards, a compliance mechanism that facilitates dispute resolution, and a host of incentives and tools designed to assist companies in meeting the standards. There are also a series of recommendations to assist with the capacity building of host-countries and communities that focus on, inter alia, transparency and corruption.

This report is non-binding for the Government of Canada. However, its recommendations provide valuable input to a government response, which is currently being prepared through an interdepartmental process.

Institutional Arrangements

The key responsibilities of Canada’s NCP are to promote the Guidelines, respond to inquiries and contribute to the resolution of specific instances of corporate conduct in relation to the Guidelines. Important guiding principles for the NCP’s activities include visibility, accessibility, transparency and accountability.

Canada’s NCP is an interdepartmental committee of the federal Government. It comprises representatives from a number of departments, including Department of Foreign Affairs and International Trade, Industry Canada, Human Resources and Social Development Canada, Environment Canada, Natural Resources Canada, the Department of Finance and the Canadian International Development Agency. The diversity of the issues covered by the Guidelines and the broad spectrum of public interest (business, labour, NGOs) in Canada underscores the importance of structuring the NCP in this way. Other departments and agencies participate in NCP activities as well. Export Development Canada is a frequent participant in NCP meetings and communications. NCP representatives exchange communication frequently and meet as required, depending on the issues at hand. The role of NCP Chair rests with the Investment Trade Policy Division of the Department of Foreign Affairs and International Trade.

The Canadian NCP’s key business and labour interlocutors on the Guidelines are the Canadian Chamber of Commerce (CCC), the Canadian Labour Congress (CLC) and the Confédération des syndicats nationaux (CSN). The NCP also has frequent contact with domestic and international NGOs.

Information and Promotion

a) Information and Promotional Tools

The Canadian NCP web site is a useful tool for promoting the Guidelines. It has also become an efficient way to communicate information on the Guidelines to our overseas missions. All of our embassies and high commissions have been informed of the Guidelines and the importance of this instrument for the promotion of CSR. Overall, the web site offers a convenient point of reference for a growing number of Canadian organizations and businesses that are seeking information on CSR.

An updated version of the Canadian NCP website was recently published in order to increase transparency regarding the submissions received and the implementation of specific instances.

b) Promotion with Social Partners

More focus is being given to the extractive sector (mining, oil and gas). Because Canada is a major player in the global extractive sector, both the Canadian Government and the Canadian industry share an interest in maintaining a positive image of Canada in this sector, and ensuring that Canadian businesses contribute positively to the broader social and environmental objectives of the communities in which they operate. Promoting the Guidelines in this sector is a concrete way for the Government to engage Canadian companies in supporting these objectives

As previously mentioned the Canadian NCP provided input into the development of the “Canadian National Roundtables on CSR and the Canadian Extractive Industry in Developing Countries” which took over the course of 2006. This was an excellent opportunity to make the Guidelines and the Canadian NCP better known to the various stakeholders involved in this process.

The NCP has also been providing support and advice on the OECD Guidelines and to the Canadian Government Working Group on the Democratic Republic of Congo in their development of a strategy on corporate social responsibility (CSR) in the mining sector.

Canadian embassies and high commissions abroad attract many Canadian firms interested in expanding their international business operations. As a result, these overseas posts are an excellent vehicle for the promotion of the Guidelines in cooperation with the business community. As mining is the single largest sector of Canadian direct foreign investment in the Americas, our embassies in this region are particularly focussed on incorporating CSR-relevant information, including references to the Guidelines, in the briefings they give to their Canadian clients. They also communicate the Government of Canada's commitment to CSR to both Canadian and local business audiences, and ensure that host governments are aware of their CSR initiatives. In March 2007, for instance, the Canadian Embassies in Ecuador, Peru and Guatemala organised CSR seminars attracting among others NGOs, local political authorities and representatives of Canadian companies, especially in the mining sector.

Industry Canada continues to promote the OECD Guidelines as part of its suite of CSR activities to strengthen the capacity of Canadian businesses to develop and use CSR practices, tools, and knowledge to achieve positive social, environmental and economic performance results. For example, in its last Sustainable Development Strategy, the Guidelines were used to help shape departmental commitments for the next three years. Commitments include: broadening and deepening CSR promotion to make the CSR approach more mainstreamed; developing the knowledge base with respect to CSR tools, voluntary standards, best practices, and data bases, and; augmenting CSR reporting by industry. A variety of actions are being pursued to help meet these commitments.

Environment Canada is actively collaborating with the private sector, academics, non-governmental organizations and other government departments to explore CSR principles and policies that encourage and support corporate sustainability leadership and are broadly aligned with the principles of the Guidelines. For example, Environment Canada's Sustainable Development Strategy includes commitments to provide the information, tools, and best practices that will enable market actors to better integrate environmental considerations into their decision-making and thereby to strengthen the business case for sustainability performance. These commitments build on the departments existing work and knowledge base with respect to: ascertaining where the business case for environmental and social performance is strong and seizing opportunities to advance CSR when they arise; encouraging, advancing and recognizing CSR best practices; developing and disseminating CSR tools, reporting approaches and domestic and international voluntary standards; and, supporting the development of human capital and human resource skills to strengthen CSR expertise.

Canadian agencies that work with the private sector internationally continue to promote awareness of the Guidelines among their partners. This is the case, for instance, of the Canadian International Development Agency (CIDA). CIDA raises awareness of the Guidelines among its partners and stakeholders in the private and other sectors through participation in outreach events across Canada, e.g. International Development Days. CIDA has supported initiatives to encourage sustainable business practices among local or foreign enterprises in developing countries with a view to supporting a positive contribution by the private sector to poverty reduction.

Export Development Canada’s (EDC) commitment to Corporate Social Responsibility (CSR) principles and standards includes the promotion of the Guidelines. EDC supports the NCP’s efforts to promote the recommendations of the Guidelines within the Canadian exporting and investing community. EDC meets with its customers, various business associations, NGOs, and other stakeholders on CSR issues as part of its efforts to promote ethical corporate conduct and continue a dialogue with these groups. Issues relating to the Guidelines, such as the environmental and social impacts of projects, anti-corruption and anti-bribery efforts, and human rights are discussed, when relevant. In addition, EDC also promotes the Guidelines through its website.

c) Promotion within the Government

Promoting the Guidelines within the government is an essential aspect of the NCP’s responsibility to raise awareness of the instrument. A number of departments and agencies interact directly with the business community, labour groups and NGOs through their programs and consultative activities. This is an important channel for alerting these groups of Canada’s commitment to support the Guidelines. The interdepartmental structure of the NCP greatly facilitates promotion within government.

The Department of Foreign Affairs and International Trade (DFAIT) provides information sessions on the Guidelines for overseas trade officials. The provision of Guidelines information is also a part of human rights training for government officials preparing for overseas postings. In 2006, DFAIT also provided information on the Guidelines on the occasion of a presentation on CSR to the “Industry Sector Young Professionals Network” in Industry Canada.

Canada's Trade Commissioner Service recognizes the importance of including CSR as an aspect of its promotional activities. As part of their regular training, Canada's trade commissioners are encouraged to incorporate the promotion of CSR (including the Guidelines) into the delivery of the core services provided to Canadian companies operating abroad.In early 2007, the Trade Commissioner Service developed a course on CSR, including a session on the OECD Guidelines. The pilot course was held on May 16, 2007.

Industry Canada continues to promote the Guidelines as part of its work activity to improve the coordination and advancement of corporate responsibility and sustainability within federal activities (e.g., federal sustainable development strategies). This also involves working in international fora, such as the OECD, and domestic conferences to improve the Department’s knowledge and understanding of CSR and related practices. Industry Canada works closely with a number of other federal departments to build more cooperation and collaboration on the promotion of CSR practices. This interdepartmental group collaborates closely with the NCP.

Environment Canada works closely with other federal departments on the development and implementation of projects to support and advance CSR principles and practices relevant to the Guidelines. This includes the administration of a memorandum of understanding between the departments of Natural Resources, Industry, Foreign Affairs and International Trade and Environment for collaboration on projects that specifically relate to: development and dissemination of information that supports CSR and sustainability decision-making; increasing understanding of the business value of CSR and sustainability; and, development and dissemination of information on the use of CSR and sustainability tools to a broad range of companies.

CIDA is promoting the Guidelines through internal knowledge networks comprised of officials working in private sector development and governance. The Guidelines are also being mainstreamed in work on conflict prevention and on poverty reduction in fragile states.

The Labour Program of Human Resources and Social Development Canada is a member of the Canadian NCP with particular interest and expertise with respect to the labour principles. The Program manages Canada's participation in the International Labour Organisation (ILO) and promotes respect for the ILO Declaration on Fundamental Principles and Rights at Work which embodies the following fundamental principles and rights: freedom of association and effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labour; the effective abolition of child labour and; the elimination of discrimination in respect of employment and occupation. These principles are part of the OECD Guidelines and are also included in the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy.

Inquiries

A number of inquiries about the Guidelines were received by the NCP in the past year. Inquiries received via e-mail are often from think-tanks and academic institutions looking for information on Canada’s experiences with the Guidelines. Other inquiries come through meetings with businesses or NGOs. Often such inquiries are about the nature of the Guidelines and their possible application in certain situations. The media made a number of inquiries in the past year, as well, mostly related to the Standing Committee on Foreign Affairs and International Trade report on Mining in Developing Countries and Corporate Social Responsibility and the Government of Canada response to the report. As well, the Guidelines are occasionally raised in the public’s correspondence with Ministers.

Submissions and Implementation in Specific Instances

No submission or specific instance was dealt with by the Canadian NCP during the current reporting year.

Concluding Remarks

The OECD Guidelines for Multinational Enterprises continue to be a central element of the Government’s approach to promoting corporate social responsibility, domestically and internationally. The interdepartmental structure of the NCP facilitates the promotion of the Guidelines within the Government and with departmental constituencies, including business, labour and NGOs. The NCP looks forward to new opportunities in the coming year to promote the Guidelines. The NCP will also follow up as required to the Government’s response to the Advisory Group’s Report on CSR and the Canadian Extractive Industry in Developing Countries.